EXHIBIT 1.1
BIOSOURCE INTERNATIONAL, INC.
4,000,000 Shares/1/
Common Stock
UNDERWRITING AGREEMENT
April __, 2000
CHASE SECURITIES INC.
XXXX XXXXXXXX INCORPORATED
XXXXXX XXXXXX PARTNERS LLC, as representatives
of the several underwriters named in Schedule I hereto
c/o CHASE SECURITIES INC.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
BioSource International, Inc., a Delaware corporation (herein called the
"Company"), proposes to issue and sell 3,350,000 shares of its authorized but
unissued Common Stock, $0.001 par value per share (herein called the "Common
Stock"), and the stockholders of the Company named in Schedule II hereto (such
stockholders named in Schedule II who are members of the management of the
Company herein collectively called the "Management Selling Securityholders," all
such other stockholders named in Schedule II herein collectively called the
"Other Selling Securityholders" and the Management Selling Securityholders and
the Other Selling Securityholders herein collectively called the "Selling
Securityholders") propose to sell an aggregate of 650,000 shares of Common Stock
of the Company (said 4,000,000 shares of Common Stock being herein called the
"Underwritten Stock"). The Company and the Other Selling Securityholders propose
to grant to the Underwriters (as hereinafter defined) an option to purchase on a
pro rata basis up to 100,000 additional shares of Common Stock from the Company
and up to 500,000 additional shares of Common Stock from the Other Selling
Securityholders (said 600,000 shares of Common Stock being herein called the
"Option Stock"
-----------
/1/Plus an option to purchase from the Company up to 100,000 additional
shares and from the Other Selling Securityholders up to 500,000 additional
shares, each of which to cover over-allotments.
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and with the Underwritten Stock herein collectively called the "Stock"). The
Common Stock is more fully described in the Registration Statement and the
Prospectus hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting as representatives, named in Schedule I
hereto (herein collectively called the "Underwriters," which term shall also
include any underwriter purchasing Stock pursuant to Section 3(b) hereof). You
represent and warrant that you have been authorized by each of the other
Underwriters to enter into this Agreement on its behalf and to act for it in the
manner herein provided.
1. Registration Statement. The Company has filed with the Securities and
Exchange Commission (herein called the "Commission") a registration statement on
Form S-3 (No. 333-32622), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (herein called the
"Securities Act") of the Stock. Copies of such registration statement and of
each amendment thereto, if any, including the related preliminary prospectus
(meeting the requirements of Rule 430A of the rules and regulations of the
Commission) heretofore filed by the Company with the Commission have been
delivered to you.
The term Registration Statement as used in this agreement shall mean such
registration statement, including all documents incorporated by reference
therein, all exhibits and financial statements, all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus referred to
below, in the form in which it became effective, and any registration statement
filed pursuant to Rule 462(b) of the rules and regulations of the Commission
with respect to the Stock (herein called a "Rule 462(b) registration
statement"), and, in the event of any amendment thereto after the effective date
of such registration statement (herein called the "Effective Date"), shall also
mean (from and after the effectiveness of such amendment) such registration
statement as so amended (including any Rule 462(b) registration statement). The
term Prospectus as used in this Agreement shall mean the prospectus, including
the documents incorporated by reference therein, relating to the Stock first
filed with the Commission pursuant to Rule 424(b) and Rule 430A (or if no such
filing is required, as included in the Registration Statement) and, in the event
of any supplement or amendment to such prospectus after the Effective Date,
shall also mean (from and after the filing with the Commission of such
supplement or the effectiveness of such amendment) such prospectus as so
supplemented or amended. The term Preliminary Prospectus as used in this
Agreement shall mean each preliminary prospectus, including the documents
incorporated by reference therein, included in such registration statement prior
to the time it becomes effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act.
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2. Representations and Warranties of the Company.
(a) The Company hereby represents and warrants as follows:
(i) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has full corporate
power and authority to own or lease its properties and conduct its business
as described in the Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation and in good
standing in all jurisdictions in which the character of the property owned
or leased or the nature of the business transacted by it makes
qualification necessary, except where the failure to be so qualified would
not have a material adverse effect on the business, properties, condition
(financial or otherwise), results of operations or prospects of the Company
and its subsidiaries, taken as a whole (herein called a "Material Adverse
Effect"). The Company's only "significant subsidiary," within the meaning
of Rule 405 of the Securities Act, is BioSource Europe S.A. The Company has
provided to the Underwriters the current organizational documents for
itself and each of its subsidiaries prior to the date hereof, and none of
such documents have been amended or otherwise modified since the date of
receipt of such documents by the Underwriters.
(ii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not occurred any
Material Adverse Effect or any development involving a prospective Material
Adverse Effect whether or not occurring in the ordinary course of business,
and there has not been any material transaction entered into or any
material transaction that is probable of being entered into by the Company,
other than transactions in the ordinary course of business and changes and
transactions described in the Registration Statement and the Prospectus.
The Company has no material contingent obligations that are not disclosed
in the Prospectus or provided for in the Company's financial statements
that are included in the Registration Statement.
(iii) The Registration Statement, the Prospectus and each document
filed or to be filed pursuant to the Securities Exchange Act of 1934, as
amended (herein called the "Exchange Act"), and incorporated by reference
in the Registration Statement and the Prospectus comply, and on the Closing
Date (as hereinafter defined) and any Option Closing Dates (as such dates
are hereinafter defined), the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder;
on the Effective Date, the Registration Statement did not contain any
untrue statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date the
Prospectus did not and, on the Closing Date and any Option Closing Date,
will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties in this
subparagraph (iii) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon and
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in conformity with information herein or otherwise furnished in writing to
the Company by or on behalf of the Underwriters for use in the Registration
Statement or the Prospectus.
(iv) The Commission has not issued an order preventing or suspending
the use of any Prospectus relating to the proposed offering of the Stock,
nor, to the best knowledge of the Company, instituted proceedings for that
purpose.
(v) The outstanding shares of capital stock of the Company and each
of its subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable; the Stock is duly and validly authorized, is
(or in the case of shares of the Stock to be sold by the Company, will be,
when issued and sold to the Underwriters as provided herein) duly and
validly issued, fully paid and non-assessable; and no preemptive, co-sale,
registration right, right of first refusal or other similar rights of
stockholders exist or have not been waived with respect to any of the Stock
or the issue and sale thereof. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for
the transfer and sale of the Stock to be sold by the Selling
Securityholders or the issuance and sale of the Stock as contemplated
herein. Except as disclosed in the Registration Statement and the
Prospectus (including the financial statements included therein or
incorporated therein by reference), (A) neither the filing of the
Registration Statement nor the offering or sale of the Stock as
contemplated by this Agreement gives rise to any rights relating to the
registration of any shares of capital stock of the Company or any of its
subsidiaries; (B) there are no contracts, agreements or understandings
between the Company or any of its subsidiaries and any person granting such
person the right to require the Company or any of its subsidiaries to file
a registration statement under the Securities Act with respect to any
securities of the Company or any of its subsidiaries owned or to be owned
by such person or to require the Company or any of its subsidiaries to
include such securities in the securities registered pursuant to any other
registration statement filed by the Company under the Securities Act; and
(C) there are no outstanding subscriptions, rights, warrants, options
(other than options to acquire Common Stock granted after March 20, 2000 to
employees of the Company in the ordinary course of business), calls,
convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company or any of its
subsidiaries.
(vi) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act. The Stock to be sold by the Selling Securityholders is listed
and duly admitted to trading on the Nasdaq National Market, and prior to
the Closing Date the Stock to be issued and sold by the Company will be
authorized for listing by the Nasdaq National Market upon official notice
of issuance.
(vii) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct in all material respects. All of the
Stock conforms in all material respects to the description thereof set
forth under the caption "Description of Capital Stock" in the Registration
Statement and the Prospectus and the description of the
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Company's capital stock in the Registration Statement on Form 8-B filed on
June 14, 1993 (which description is incorporated by reference into the
Prospectus). The form of certificate for the Stock conforms to the legal
requirements of the State of Delaware and any applicable stock market rules
and regulations.
(viii) The financial statements of the Company, together with the
related notes and schedules set forth in or incorporated by reference into
the Registration Statement, present fairly, the financial position and the
results of operations and cash flows of the Company and its subsidiaries on
a consolidated basis at the indicated dates and for the indicated periods.
Such financial statements and related schedules have been prepared in
accordance with generally accepted principles of accounting, consistently
applied throughout the periods involved, and all adjustments necessary for
a fair presentation of results for such periods have been made. The summary
and selected financial data included in the Registration Statement present
fairly the information shown therein and such data has been compiled on a
basis consistent with the financial statements presented therein and the
books and records of the Company and its subsidiaries. No financial
statements, pro forma financial statements, schedules or other financial
data are required to be included in the Registration Statement other than
those which have been so included.
(ix) KPMG LLP, who have certified certain of the financial statements
filed with the Commission as part of or incorporated by reference in the
Registration Statement, are independent public accountants as required by
the Securities Act and the Rules and Regulations of the Commission
thereunder.
(x) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company or any of its subsidiaries, threatened against the
Company, any of its subsidiaries or any of their respective directors,
officers or properties, before any court or administrative agency or
otherwise, which if determined adversely to the Company or such
subsidiaries could reasonably be expected to result in any Material Adverse
Effect or prevent the consummation of the transactions contemplated hereby;
and there are no agreements, contracts, leases or documents of the Company
or any of its subsidiaries of a character required to be described or
referred to in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement by the Securities Act or the Rules
and Regulations which have not been accurately described in all material
respects or referred to in the Registration Statement or Prospectus or
filed as exhibits to the Registration Statement. The contracts so described
in the Registration Statement and Prospectus are in full force and effect
on the date hereof, and neither the Company nor any of its subsidiaries
nor, to the best of the knowledge of the Company and its subsidiaries, any
other party, is in breach of or default under any of such contracts where
such breach or default would have a Material Adverse Effect.
(xi) Each of the Company and its subsidiaries has good and marketable
title to all of the properties and assets as described in the Registration
Statement or as reflected in the financial statements filed with the
Commission as part of the Registration Statement, free and clear of any
lien, mortgage, pledge, charge or encumbrance of any
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kind except those reflected in such financial statements or as described in
the Registration Statement. All leases to which the Company or any of its
subsidiaries is a party are valid and binding obligations of the Company
and its subsidiaries, respectively, and no default by the Company or any of
its subsidiaries has occurred or is continuing thereunder which could
reasonably be expected to result in a Material Adverse Effect; and the
Company and its subsidiaries enjoy peaceful and undisturbed possession
under all such leases to which they are a party as lessee. Except as set
forth in the Registration Statement and Prospectus, the Company and its
subsidiaries own or lease all such properties as are necessary to their
operations as described in the Registration Statement and Prospectus.
(xii) Each of the Company and its subsidiaries has timely filed all
federal, state, local and foreign income tax returns which have been
required to be filed and have paid all taxes required by said returns and
all assessments received by them or any of them to the extent that such
taxes have become due and are not being contested in good faith except
where the failure to file such returns and pay such taxes would not have a
Material Adverse Effect. All tax liabilities (including those being
contested in good faith) for the periods covered by the financial
statements of the Company that are included in the Registration Statement
have been adequately accounted for or described in such financial
statements. The Company has made adequate charges, accruals and reserves in
the applicable financial statements included in the Prospectus in respect
of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its
consolidated subsidiaries has not been finally determined.
(xiii) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby, including, without
limitation, the corporate power and authority to issue, sell and deliver
the Stock as provided herein.
(xiv) This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except insofar as indemnification
and contribution provisions may be limited by applicable law or equitable
principles and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally, by general equitable principles or
by considerations of public policy.
(xv) Neither the Company nor any of its subsidiaries is, nor with the
giving of notice or lapse of time or both will be, in violation of or in
default (A) under its respective certificate of incorporation or by-laws or
equivalent organizational documents or (B) under an agreement, lease,
contract, indenture or other instrument or obligation to which it is a
party or by which it, or any of its properties, is bound and which defaults
under this clause (B), individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under any indenture, mortgage, deed of trust or other agreement
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or instrument to which the Company or any of its subsidiaries is a party,
or of the certificate of incorporation or equivalent organizational
documents of the Company or any of its subsidiaries or any law, order, rule
or regulation, injunction, judgment or decree applicable to the Company or
any of its subsidiaries of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction over
the Company or any of its subsidiaries.
(xvi) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (herein called the "NASD")
or such additional steps as may be necessary to qualify the Stock for
public offering by the Underwriters under state securities or blue sky
laws) has been obtained or made and is in full force and effect.
(xvii) Each of the Company and its subsidiaries now holds and at the
Closing Date and any later date on which the Option Stock is purchased, as
the case may be, will hold, all licenses, consents, certificates, orders,
approvals and permits from all state, United States, foreign and other
governmental or regulatory authorities, including, but not limited to, the
U.S. Food and Drug Administration (herein called the "FDA") and any foreign
and state governmental or regulatory authorities performing functions
similar to those performed by the FDA, that are required for the conduct of
the business of the Company and its subsidiaries as such business is
currently conducted and as proposed to be conducted as described in the
Prospectus, all of which are valid and in full force and effect (and there
is no proceeding pending or, to the best knowledge of the Company or its
subsidiaries, threatened which may cause any such license, consent,
certificate, order, approval or permit to be withdrawn, canceled, suspended
or not renewed), except for such licenses, certificates approvals and
permits the failure of which to maintain or to keep valid and in full force
and effect would not have a Material Adverse Effect. Each of the Company
and its subsidiaries is in compliance in all material respects with all
applicable foreign, FDA, state and local rules, regulations, guidelines and
policies, including, without limitation, applicable foreign, FDA, state and
local rules, regulations and policies relating to good laboratory practice,
and good manufacturing practices. Neither the Company nor any of its
subsidiaries has violated, or received notice of an alleged violation of,
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants or relating to
discrimination in the hiring, promotion or pay of, or to the wages and
hours of, employees, except for such violations as in the aggregate would
not result in any Material Adverse Effect. To the best of the Company's and
each of its subsidiaries' knowledge, no labor disturbance by the employees
of the Company or any of its subsidiaries exists or is imminent, and
neither the Company nor any of its subsidiaries is aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers, value added resellers, authorized dealers or distributors that
might be expected to result in a Material Adverse Effect. Except as
disclosed in the Registration Statement, no collective bargaining
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agreement exists with any of the Company's or its subsidiaries' employees
and, to the best of the Company's and each of its subsidiaries' knowledge,
no such agreement is imminent.
(xviii) The Company is in compliance in all material respects with all
currently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder (herein called "ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any liability; the
Company has not incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretation
thereunder (herein called the "Code"); and each "pension plan" for which
the Company would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, that would
cause the loss of such qualification.
(xix) Each of the Company and its subsidiaries is conducting its
business in compliance with all of the applicable laws, rules and
regulations of the jurisdictions in which it is conducting business,
including, but not limited to, (i) the laws, rules and regulations
administered or promulgated by the FDA or any foreign, state or local
governmental or regulatory authorities, performing functions similar to
those performed by the FDA body exercising comparable authority and (ii)
all laws, rules and regulations applicable to the import and export of the
Company's products, except where any such failure to be in compliance would
not have a Material Adverse Effect.
(xx) Except as indicated in the Registration Statement and the
Prospectus, the Company and its subsidiaries do not own any patents or
registered trademarks and have not applied for any patent or the
registration of any trademark. The Company and its subsidiaries own,
possess or have the right to use all patents, inventions, designs, trade
secrets, know-how, trademarks, service marks, trade names, copyrights,
domain names, technical data and other information (herein collectively
called "Intellectual Property") that are necessary to conduct its business
as described in the Registration Statement and the Prospectus. Neither the
Company nor any of its subsidiaries has received any notice of, and has no
knowledge of, any infringement of or conflict with any rights of the
Company or any of its subsidiaries by others with respect to any
Intellectual Property which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has received any
notice of, and has no knowledge of, any infringement of or conflict with
any rights of others with respect to any Intellectual Property which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect. To the best of the
Company's and each of its subsidiaries' knowledge, none of the Intellectual
Property licensed to or by the Company or any of its subsidiaries is
unenforceable or invalid. Neither the Company nor any of its subsidiaries
is aware of the granting of any patent rights to third parties or the
filing of
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any patent applications by third parties or any other rights of third
parties to any Intellectual Property owned by the Company or any of its
subsidiaries which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(xxi) Neither the Company nor any of its subsidiaries has taken,
directly or indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Stock.
(xxii) Each of the Company and its subsidiaries is not and, after
giving effect to the offering and sale of the Stock and the application of
the net proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended.
(xxiii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (a) transactions are
executed in accordance with management's general or specific authorization;
(b) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (c) access to assets
is permitted only in accordance with management's general or specific
authorization; and (d) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxiv) Each of the Company and its subsidiaries carries, or is covered
by, insurance with insurers of nationally recognized reputability in such
amounts and covering such risks as it believes is customary for companies
engaged in similar industries, all of which insurance is in full force and
effect.
(xxv) The statements in the Prospectus under the heading
"Relationships and Related Transactions" set forth all existing agreements,
arrangements, understandings or transactions or currently proposed
agreements, arrangements, understandings or transactions between or among
the Company or any of its subsidiaries, on the one hand, and any officer,
director or stockholder of the Company or with any partner, affiliate or
associate of any of the foregoing persons or entities, on the other hand,
required to be set forth or described thereunder pursuant to the Securities
Act and the Rules and Regulations of the Commission thereunder.
(xxvi) There are no issues related to the preparedness of the Company
or any of its subsidiaries for the Year 2000 that (a) are of a character
required to be described or referred to in the Registration Statement or
Prospectus by the Securities Act or the Rules and Regulations of the
Commission thereunder which have not been accurately described in the
Registration Statement or Prospectus or (b) might reasonably be expected to
result in any Material Adverse Effect. Except as set forth in the
Registration Statement, all internal computer systems and all software
(including operating systems, programs,
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packages and utilities), firmware, hardware, networking components and
peripherals provided as part of the configuration (hereinafter "Constituent
Component") and all computer-related products and each Constituent
Component of those products of the Company and each of its subsidiaries (a)
have been reviewed to confirm that they store, process (including sorting
and performing mathematical operations, calculations and computations),
input and output data containing date and information correctly regardless
of whether the date contains dates and times before, on or after January 1,
2000, (b) have been designated to ensure date and time entry recognition,
calculations that accommodate same century and multi-century formulas and
date values, leap year recognition and calculations, and date data
interface values that reflect the century, (c) accurately manage and
manipulate data involving dates and times including single century formulas
and multi-century formulas, and will not cause an abnormal ending scenario
within the application or generate incorrect values or invalid results
involving such dates, (d) accurately process any date rollover and (e)
accept and respond to two-digit year date input in a manner that resolves
any ambiguities as to the century.
(xxvii) Neither the Company nor any of its subsidiaries has at any
time since its inception (a) made any unlawful contribution to any
candidate for foreign office, failed to disclose fully any contribution in
violation of applicable law, (b) violated the Foreign Corrupt Practices Act
of 1977, as amended, or (c) made any payment to any federal or state
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by
the laws of the United States or any jurisdiction thereof.
(xxviii) Neither the Company nor any of its subsidiaries has
distributed or will distribute prior to the later of (a) the Closing Date
or the last Option Closing Date, as the case may be, and (b) completion of
the distribution of the Stock, any offering material in connection with the
offering and sale of the Stock other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any,
permitted by the Securities Act.
(xxix) Neither the Company nor any of its subsidiaries has incurred
any liability for any finder's fees or similar payments in connection with
the transactions contemplated hereby other than to the Underwriters.
(xxx) The statements (including the assumptions described therein)
included in the Prospectus are (i) within the coverage of Rule 175(b) under
the Securities Act to the extent such data constitute forward looking
statements as defined in Rule 175(c) and (ii) were made by the Company with
a reasonable basis and reflect the Company's good faith estimate of the
matters described therein.
Each certificate signed by any officer of the Company and delivered to the
Underwriters or counsel for the Underwriters pursuant to this Agreement shall be
deemed to be a representation and warranty by the Company to the Underwriters as
to the matters covered thereby. The Company acknowledges that each of the
Underwriters and, for purposes of the opinion to be delivered to the
Underwriters pursuant to Section 9(c) hereof, counsel to the
10
Underwriters and counsel to the Company, will rely upon the accuracy and truth
of the foregoing representations and hereby consents to such reliance.
(b) Each of the Selling Securityholders hereby represents and warrants as
follows (provided that only the Other Selling Securityholders shall make any
representation and warranty with respect to clauses (iii) and (xi) below):
(i) Such Selling Securityholder has good and marketable title to all
the shares of Stock to be sold by such Selling Securityholder hereunder,
free and clear of all liens, encumbrances, equities, security interests and
claims whatsoever, with full right and authority to deliver the same
hereunder, subject to the rights of U.S. Stock Transfer Corporation, as
Custodian (herein called the "Custodian") and to the rights of the several
Underwriters, and upon the delivery of and payment for such shares of the
Stock hereunder, the several Underwriters will receive good and marketable
title thereto, free and clear of all liens, encumbrances, equities,
security interests and claims whatsoever.
(ii) In the case of each of the Management Selling Securityholders,
certificates in negotiable form for the shares of the Stock to be sold by
such Selling Securityholder have been placed in custody under a Custody
Agreement, dated as of April ___, 2000 (the "Custody Agreement"), between
such Selling Securityholder and the Custodian, for delivery under this
Agreement with the Custodian; such Selling Securityholder specifically
agrees that the shares of the Stock represented by the certificates so held
in custody for such Selling Securityholder are subject to the interests of
the several Underwriters and the Company, that the arrangements made by
such Selling Securityholder for such custody, including the Power of
Attorney to which such Custody Agreement is an exhibit, are to that extent
irrevocable, and that, except as set forth in the Custody Agreement, the
obligations of such Selling Securityholder shall not be terminated by any
act of such Selling Securityholder or by operation of law, whether by the
death or incapacity of such Selling Securityholder (or, in the case of a
Selling Securityholder that is not an individual, the dissolution or
liquidation of such Selling Securityholder) or the occurrence of any other
event; if any such death, incapacity, dissolution, liquidation or other
such event should occur before the delivery of such shares of the Stock
hereunder, certificates for such shares of the Stock shall be delivered by
the Custodian in accordance with the terms and conditions of this Agreement
as if such death, incapacity, dissolution, liquidation or other event had
not occurred, regardless of whether the Custodian shall have received
notice of such death, incapacity, dissolution, liquidation or other event.
(iii) Such Other Selling Securityholder has all requisite power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby,
including, without limitation, the power and authority to sell and deliver
the Stock as provided herein.
(iv) This Agreement has been, in the case of each of the Other Selling
Securityholders, duly authorized, and in the case of each of the Selling
Securityholders, duly executed and delivered by or on behalf of such
Selling Securityholder, and is a valid
11
and binding agreement of such Selling Securityholder, enforceable in
accordance with its terms except insofar as indemnification and
contribution provisions may be limited by applicable law or equitable
principles and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally, by general equitable principles or
by considerations of public policy. In the case of each of the Management
Selling Securityholders, such Selling Securityholder has duly and
irrevocably executed and delivered a Power of Attorney (the "Power of
Attorney") appointing Xxxxx Xxxxxxxxxxx and Xxxxxxx Xxxx, as attorneys-in-
fact, with full power of substitution, and with full authority to execute
and deliver this Agreement and the Custody Agreement between such Selling
Securityholder and the Custodian, and to take such other actions as may be
necessary or desirable to carry out the provisions hereof or thereof, in
each case on behalf of the Selling Securityholder.
(v) In the case of the Management Selling Securityholders, such
Selling Securityholder has reviewed the Registration Statement and
Prospectus and, although such Selling Securityholder has not independently
verified the accuracy or completeness of all the information contained
therein, nothing has come to the attention of such Selling Securityholder
that would lead such Selling Securityholder to believe that on the
Effective Date, the Registration Statement contained any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus did not contain and,
on the Closing Date and any Option Closing Date, as the case may be, will
not contain any untrue statement of a material fact or did not omit or will
not omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(vi) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by such Selling Securityholder of this Agreement and the consummation of
the transactions herein contemplated (except such additional steps as may
be required by the NASD or such additional steps as may be necessary to
qualify the Stock for public offering by the Underwriters under state
securities or blue sky laws) has been obtained or made and is in full force
and effect.
(vii) Such Selling Securityholder has not distributed and will not
distribute prior to the later of (a) the Closing Date or on an Option
Closing Date, as the case may be, and (b) completion of the distribution of
the Stock, any offering documents or related material in connection with
the offering and sale of the Stock other than any Preliminary Prospectuses,
the Prospectus, the Registration Statement and other materials, if any,
permitted by the Securities Act.
(viii) The information in the Prospectus under the caption "Principal
and Selling Stockholders" which specifically relates to such Selling
Securityholder and any written information furnished by or on behalf of
such Selling Securityholder that is set forth in the Registration Statement
and Prospectus does not, and will not on the Closing Date or
12
on any Option Closing Date, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ix) Such Selling Securityholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Stock.
(x) Such Selling Securityholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first
refusal or other similar right to purchase any of the shares that are to be
sold by the Company or any of the other Selling Securityholders to the
Underwriters pursuant to this Agreement. Except as disclosed in the
Registration Statement, such Selling Securityholder does not have, or has
waived prior to the date hereof, any registration right or similar right to
participate in the offering made by the Prospectus, other than such rights
of participation as have been satisfied by the participation of such
Selling Securityholder in the transactions to which this Agreement relates
in accordance with the terms of this Agreement.
(xi) In the case of the Other Selling Securityholders, the sale by
each such Other Selling Securityholder of the shares of Stock as
contemplated by this Agreement will not conflict with, or result in a
breach of, any agreement or instrument to which such Other Selling
Securityholder is a party or by which such Other Selling Securityholder is
bound or to which any of the property or assets of such Other Selling
Securityholder is subject.
Each certificate signed by the Custodian and delivered to the Underwriters
or counsel for the Underwriters pursuant to this Agreement shall be deemed to be
a representation and warranty by such Selling Securityholder to the Underwriters
as to the matters covered thereby. The Other Selling Securityholders acknowledge
that each of the Underwriters and, for purposes of the opinion to be delivered
to the Underwriters pursuant to Section 9(c) hereof, counsel to the
Underwriters, counsel to the Company and counsel to the Selling Securityholders
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
3. Purchase of the Stock by the Underwriters.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
3,350,000 shares of the Underwritten Stock to the several Underwriters, each
Selling Securityholder agrees to sell to the several Underwriters the number of
shares of the Underwritten Stock set forth in Schedule II opposite the name of
such Selling Securityholder, and each of the Underwriters agrees to purchase
from the Company and the Selling Securityholders the respective aggregate number
of shares of Underwritten Stock set forth opposite its name in Schedule I. The
price at which such shares of Underwritten Stock shall be sold by the Company
and the Selling Securityholders and purchased by the several Underwriters shall
be $___ per share. The obligation of each Underwriter to the Company and each of
the Selling Securityholders shall be to purchase from the Company and the
Selling Securityholders that number of shares of the Underwritten Stock which
represents the same proportion of the total number of shares of the Underwritten
Stock to be sold by each of the Company and the Selling Securityholders pursuant
to this Agreement as the number of shares of the Underwritten Stock set forth
opposite the name of such Underwriter in Schedule I hereto represents of the
total number of shares of the Underwritten Stock to be purchased by all
Underwriters pursuant to this Agreement, as adjusted by you in such manner as
13
you deem advisable to avoid fractional shares. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in
paragraphs (b) and (c) of this Section 3, the agreement of each Underwriter is
to purchase only the respective number of shares of the Underwritten Stock
specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 8 or 9 hereof) to purchase and pay for
the number of shares of the Stock agreed to be purchased by such Underwriter or
Underwriters, the Company or the Selling Securityholders shall immediately give
notice thereof to you, and the non-defaulting Underwriters shall have the right
within 24 hours after the receipt by you of such notice to purchase, or procure
one or more other Underwriters to purchase, in such proportions as may be agreed
upon between you and such purchasing Underwriter or Underwriters and upon the
terms herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company and each of the Selling Securityholders shall have the right, within 24
hours next succeeding the 24-hour period above referred to, to make arrangements
with other underwriters or purchasers satisfactory to you for purchase of such
shares and portion on the terms herein set forth. In any such case, either you
or the Company and each of the Selling Securityholders shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company or any
of the Selling Securityholders shall make arrangements within the 24-hour
periods stated above for the purchase of all the shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company or any of the Selling Securityholders to
any non-defaulting Underwriter and without any liability on the part of any non-
defaulting Underwriter to the Company or any of the Selling Securityholders.
Nothing in this paragraph (b), and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Company
and the Other Selling Securityholders grant an option to the several
Underwriters to purchase, severally and not jointly, on a pro rata basis up to
100,000 shares in the aggregate of the Option Stock from the Company
14
and up to 500,000 shares in the aggregate of the Option Stock from the Other
Selling Securityholders (in the amounts set forth in Schedule I with respect to
such Other Selling Securityholders) at the same price per share as the
Underwriters shall pay for the Underwritten Stock. Said option may be exercised
only to cover over-allotments in the sale of the Underwritten Stock by the
Underwriters and may be exercised in whole or in part from time to time on or
before the thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number of
shares of the Option Stock as to which the several Underwriters are exercising
the option. Delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made as provided in Section 5 hereof. The number of shares of
the Option Stock to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Stock to be purchased by
the several Underwriters as such Underwriter is purchasing of the Underwritten
Stock, as adjusted by you in such manner as you deem advisable to avoid
fractional shares.
4. Offering by Underwriters.
(a) The terms of the public offering by the Underwriters of the Stock to be
purchased by them shall be as set forth in the Prospectus. The Underwriters may
from time to time change the public offering price after the closing of the
initial public offering and increase or decrease the concessions and discounts
to dealers as they may determine.
(b) The information set forth under "Underwriting" in the Registration
Statement, any Preliminary Prospectus and the Prospectus relating to the Stock
filed by the Company (insofar as such information relates to the Underwriters)
constitutes the only information furnished by the Underwriters to the Company
for inclusion in the Registration Statement, any Preliminary Prospectus, and the
Prospectus, and you on behalf of the respective Underwriters represent and
warrant to the Company that the statements made therein are correct.
5. Delivery of and Payment for the Stock.
(a) Delivery of certificates for the shares of the Underwritten Stock and
the Option Stock (if the option granted by Section 3(c) hereof shall have been
exercised not later than 7:00 A.M., San Francisco time, on the date two business
days preceding the Closing Date), and payment therefor, shall be made at the
office of Troop Xxxxxxx Xxxxxx Xxxxxxx & Xxxxx, LLP, 0000 Xxxxxxx Xxxx Xxxx,
00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, at 7:00 a.m., San Francisco time, on
the fourth business day after the date of this Agreement, or at such time on
such other day, not later than seven full business days after such fourth
business day, as shall be agreed upon in writing by the Company, the Selling
Securityholders and you. The date and hour of such delivery and payment (which
may be postponed as provided in Section 3(b) hereof) are herein called the
"Closing Date."
(b) If the option granted by Section 3(c) hereof shall be exercised after
7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Troop Xxxxxxx Pasich Reddick &
Xxxxx, LLP, 0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
at 7:00 a.m., San Francisco time, on the third business day after the exercise
of
15
such option. The date and hour of each such delivery and payment (each of
which may be postponed as provided in Section 3(b) hereof) are herein called an
"Option Closing Date."
(c) Payment for the Stock purchased from the Company shall be made to the
Company or its order and payment for the Stock purchased from the Selling
Securityholders shall be made to the Custodian, for the account of the Selling
Securityholders, in each case by one or more wire transfers of same day funds.
Such payment shall be made upon delivery of certificates for the Stock to you
for the respective accounts of the several Underwriters against receipt therefor
signed by you. Certificates for the Stock to be delivered to you shall be
registered in such name or names and shall be in such denominations as you may
request at least one business day before the Closing Date, in the case of
Underwritten Stock, and at least one business day prior to the purchase thereof,
in the case of the Option Stock. Such certificates will be made available to
the Underwriters for inspection, checking and packaging at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx,
Xxxxxxxxxx, 00000 on the business day prior to the Closing Date or, in the case
of the Option Stock, by 3:00 p.m., New York time, on the business day preceding
the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholders for shares to be purchased by any Underwriter
whose check shall not have been received by you on the Closing Date or any later
date on which Option Stock is purchased for the account of such Underwriter.
Any such payment by you shall not relieve such Underwriter from any of its
obligations hereunder.
6. Further Agreements of the Company and the Selling Securityholders. The
Company covenants and agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission under
Rule 424(b) a Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance on Rule 430A and (ii)
not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act or the rules and regulations of the
Commission thereunder.
(b) The Company will promptly notify each Underwriter in the event of (i)
the request by the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company and
the Selling Securityholders will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be issued,
to obtain the withdrawal thereof at the earliest possible moment.
16
(c) The Company will (i) on or before the Closing Date, deliver to you a
signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each post-
effective amendment, if any, to the Registration Statement (together with, in
each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request, and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or a dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of counsel
for the Company or of counsel for the Underwriters, to supplement or amend the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser of the Stock,
the Company will forthwith prepare and file with the Commission a supplement to
the Prospectus or an amended prospectus so that the Prospectus as so
supplemented or amended will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time such Prospectus
is delivered to such purchaser, not misleading. If, after the initial public
offering of the Stock by the Underwriters and during such period, the
Underwriters shall propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the Company
in writing of the proposed variation, and, if in the opinion either of counsel
for the Company or of counsel for the Underwriters such proposed variation
requires that the Prospectus be supplemented or amended, the Company will
forthwith prepare and file with the Commission a supplement to the Prospectus or
an amended prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the several
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general
17
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission, unless any of the foregoing reports, information and documents
previously has been filed with the Commission by XXXXX.
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders an earnings statement in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the NASD of the Registration Statement, any Preliminary
Prospectus and the Prospectus, (ii) the furnishing to the Underwriters of copies
of any Preliminary Prospectus and of the several documents required by paragraph
(c) of this Section 6 to be so furnished, (iii) the printing of this Agreement
and related documents delivered to the Underwriters, (iv) the preparation,
printing and filing of all supplements and amendments to the Prospectus referred
to in paragraph (d) of this Section 6, (v) the furnishing to you and the
Underwriters of the reports and information referred to in paragraph (g) of this
Section 6, (vi) the fees, disbursements and expenses of the Company's counsel,
the Company's accountants and any Selling Securityholders' counsel (in addition
to the Company's counsel) and (vii) the printing and issuance of stock
certificates, including the transfer agent's fees.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for (1) blue sky fees and related disbursements (including counsel
fees and disbursements and cost of printing memoranda for the Underwriters) paid
by or for the account of the Underwriters or their counsel in qualifying the
Stock under state securities or blue sky laws and (2) fees and related
disbursements (including counsel fees and disbursements and costs of counsel to
Underwriters) paid by the Underwriters or their counsel in connection with the
review and clearance of the offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are intended
to relieve the Underwriters from the payment of the expenses and costs which the
Company and the Selling Securityholders hereby agree to pay and shall not affect
any agreement which the Company and the Selling Securityholders may make, or may
have made, for the sharing of any such expenses and costs.
(l) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a
18
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
Each of the Selling Securityholders, severally and not jointly, agrees
to pay any transfer taxes incident to the transfer to the Underwriters of the
shares of the Stock being sold by such Selling Securityholder.
The Company and each of the Selling Securityholders hereby agrees
that, without the prior written consent of Chase Securities Inc. on behalf of
the Underwriters, the Company or such Selling Securityholder, as the case may
be, will not, for a period of 90 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, (i) sell,
offer, contract to sell, make any short sale, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for or any rights to purchase or acquire Common Stock or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Stock to be sold to the Underwriters pursuant to this
Agreement, (B) shares of Common Stock issued by the Company upon the exercise of
options granted under the stock option plans of the Company (the "Option Plans")
or upon the exercise by any person other than the Selling Securityholders of
warrants outstanding as of the date hereof, all as described in the first
paragraph following the table under the caption "Capitalization" in the
Preliminary Prospectus, and (C) options to purchase Common Stock granted under
the Option Plans.
7. Indemnification and Contribution.
19
(a) Subject to the provisions of paragraph (f) of this Section 7, the
Company and the Selling Securityholders severally and not jointly agree to
indemnify and hold harmless each Underwriter and each person (including each
partner or officer thereof) who controls any Underwriter within the meaning of
Section 15 of the Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Exchange Act, or
the common law or otherwise, and the Company and the Selling Securityholders
severally and not jointly agree to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company and the
Selling Securityholders contained in this paragraph (a) shall not apply to any
such losses, claims, damages, liabilities or expenses if such statement or
omission was made in reliance upon and in conformity with information furnished
as herein stated or otherwise furnished in writing to the Company by or on
behalf of any Underwriter for use in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, (2) the indemnity agreement contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
(excluding the documents incorporated therein by reference) and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented) unless the failure is the result of noncompliance by the Company
with paragraph (c) of Section 6 hereof, and (3) each Selling Securityholder
shall only be liable under this paragraph with respect to (A) information
pertaining to such Selling Securityholder furnished in writing by or on behalf
of such Selling Securityholder expressly for use in any Preliminary Prospectus
or the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto or (B) facts that would constitute a breach of any
representation or warranty of such Selling Securityholder set forth in Section
2(b) hereof. The indemnity agreements of the Company and the Selling
Securityholders contained in this paragraph (a) and the representations and
warranties of the Company and the Selling Securityholders contained in Section 2
hereof
20
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his own
behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, and each of the Selling Securityholders from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such indemnified parties or any of them may become subject under the
Securities Act, the Exchange Act, or the common law or otherwise and to
reimburse each of them for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement) or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, if
such statement or omission was made in reliance upon and in conformity with
information furnished as herein stated or otherwise furnished in writing to the
Company by or on behalf of such indemnifying Underwriter for use in any
Preliminary Prospectus or the Registration Statement or the Prospectus or any
such amendment thereof or supplement thereto. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and (b)
of this Section 7 agrees that, upon the service of a summons or other initial
legal process upon it in any action or suit instituted against it or upon its
receipt of written notification of the commencement of any investigation or
inquiry of, or proceeding against, it in respect of which indemnity may be
sought on account of any indemnity agreement contained in such paragraphs, it
will promptly give written notice (herein called the "Notice") of such service
or notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be available
to any party who shall fail so to give the Notice if the party to whom such
Notice was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the Notice would have related and was prejudiced by the
failure to give the Notice, but the omission so to notify such indemnifying
party or parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of such
21
indemnity agreement. Any indemnifying party shall be entitled at its own expense
to participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. Any indemnifying party shall
be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the "Notice of Defense") to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under paragraph (a) or (b)
of this Section 7, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in paragraph (a) or (b) of this Section 7 (i) in such proportion as
is appropriate to reflect the relative benefits received by each indemnifying
party from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of each indemnifying party in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and each
of the Selling Securityholders, as the case may be, on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and each of the Selling Securityholders, as the case may be, and the
total underwriting discount received by the
22
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. Relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Stock purchased by such Underwriter. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither the Company nor the Selling Securityholders will, without the
prior written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of such Underwriter and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding.
(f) The liability of each Selling Securityholder under such Selling
Securityholder's representations and warranties contained in paragraph (b) of
Section 2 hereof and the liability of each Selling Securityholder under the
indemnity and reimbursement agreements contained in the provisions of this
Section 7 and Section 11 hereof shall be limited to an amount equal to the
initial public offering price of the stock sold by such Selling Securityholder
to the Underwriters less any underwriting discounts and commissions paid thereon
by such Selling Securityholder.
23
The Company and the Selling Securityholders may agree, as among themselves and
without limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
8. Termination. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Custodian, on behalf of each of the Selling Securityholders, if after the date
of this Agreement trading in the Common Stock shall have been suspended, or if
there shall have occurred (i) the engagement in hostilities or an escalation of
major hostilities by the United States or the declaration of war or a national
emergency by the United States on or after the date hereof, (ii) any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, calamity,
crisis or change in economic or political conditions in the financial markets of
the United States would, in the Underwriters' reasonable judgment, make the
offering or delivery of the Stock impracticable, (iii) suspension of trading in
securities generally or a material adverse decline in value of securities
generally on the New York Stock Exchange, the American Stock Exchange, or The
Nasdaq Stock Market, or limitations on prices (other than limitations on hours
or numbers of days of trading) for securities on either such exchange or system,
(iv) the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of, or commencement of any proceeding
or investigation by, any court, legislative body, agency or other governmental
authority which in the Underwriters' reasonable opinion materially and adversely
affects or will materially or adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by either federal, California
or New York State authorities or (vi) the taking of any action by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
which in the Underwriters' reasonable opinion has a material adverse effect on
the securities markets in the United States. If this Agreement shall be
terminated pursuant to this Section 8, there shall be no liability of the
Company or the Selling Securityholders to the Underwriters and no liability of
the Underwriters to the Company or the Selling Securityholders; provided,
however, that in the event of any such termination the Company and the Selling
Securityholders agree to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the Company
and the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
9. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by or on behalf of the Selling Securityholders of
all their respective obligations to be performed hereunder at or prior to the
Closing Date or any Option Closing Date, as the case may be, and to the
following further conditions:
(a) The Registration Statement shall have become effective; and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and
the validity and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form of
the Registration Statement and of the
24
Prospectus (except as to the financial statements contained therein), shall have
been approved at or prior to the Closing Date by Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Underwriters.
(c) You shall have received from Troop Xxxxxxx Pasich Reddick & Xxxxx LLP,
counsel for the Company and the Management Selling Securityholders, from Xxxxxx
& Xxxxxxx, counsel for the Other Selling Securityholders and from Xxxxxxxx
Chance LLP, special Belgian counsel for the Company, opinions, addressed to the
Underwriters and dated the Closing Date, covering the matters set forth in Annex
A, Annex B and Annex C hereto, respectively, and if Option Stock is purchased at
any date after the Closing Date, additional opinions from each such counsel,
addressed to the Underwriters and dated such Option Closing Date, confirming
that the statements expressed as of the Closing Date in such opinions remain
valid as of such Option Closing Date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, and, since such dates, except in the ordinary
course of business, neither the Company nor any of its subsidiaries has entered
into any material transaction not referred to in the Registration Statement in
the form in which it originally became effective and the Prospectus contained
therein, (iv) neither the Company nor any of its subsidiaries has any material
contingent obligations which are not disclosed in the Registration Statement and
the Prospectus, (v) there are not any pending or known threatened legal
proceedings to which the Company or any of its subsidiaries is a party or of
which property of the Company or any of its subsidiaries is the subject which
are material and which are not disclosed in the Registration Statement and the
Prospectus, (vi) there are not any franchises, contracts, leases or other
documents which are required to be filed as exhibits to the Registration
Statement which have not been filed as required, (vii) the representations and
warranties of the Company and the Selling Securityholders herein are true and
correct in all material respects as of the Closing Date or any later date on
which Option Stock is to be purchased, as the case may be, and (viii) there has
not been any material change in the market for securities in general or in
political, financial or economic conditions from those reasonably foreseeable as
to render it impracticable in your reasonable judgment to make a public offering
of the Stock, or a material adverse change in market levels for securities in
general (or those of companies in particular) or financial or economic
conditions which render it inadvisable to proceed with such offering.
(e) The Prospectus shall have been printed and copies distributed to the
Underwriters not later than 10:00 a.m., San Francisco time, on the second
business day following the date of this Agreement or at such later date and time
as to which the Underwriters may agree.
25
(f) You shall have received on the Closing Date and on any Option Closing
Date, dated the Closing Date or such Option Closing Date, as the case may be,
and signed by the President and the Chief Financial Officer of the Company,
stating that the respective signers of said certificate have carefully examined
the Registration Statement in the form in which it originally became effective
and the Prospectus contained therein and any supplements or amendments thereto,
that the statements included in clauses (i) through (vii) of paragraph (d) of
this Section 9 are true and correct (excluding clause (vii) with respect to the
Selling Securityholders) and that the Company has complied with all agreements
contained herein to be performed by the Company prior to the Closing Date or
such Option Closing Date, as the case may be.
(g) You shall have received on the Closing Date and on any Option Closing
Date, dated the Closing Date or such Option Closing Date, as the case may be,
and signed by an attorney-in-fact pursuant to the Powers of Attorney, stating
that the statements included in clause (vii), solely with respect to the
Management Selling Securityholders, are true and correct, and that each of the
Management Selling Securityholders has complied with all agreements contained
herein, as well as in the Custody Agreement and Power of Attorney signed by each
Selling Securityholder, to be performed by the Management Selling
Securityholders prior to the Closing Date or such Option Closing Date, as the
case may be.
(h) You shall have received on the Closing Date and on any Option Closing
Date, dated the Closing Date or such Option Closing Date, as the case may be,
and signed by an authorized person of each of the Other Selling Securityholders,
stating that the statements included in clause (vii), solely with respect to the
Other Selling Securityholders, are true and correct, and that each of the Other
Selling Securityholders has complied with all agreements contained herein to be
performed by the Other Selling Securityholders prior to the Closing Date or such
Option Closing Date, as the case may be.
(i) You shall have received from KPMG LLP, a letter or letters, addressed
to the Underwriters and dated the Closing Date and any Option Closing Date, as
the case may require, confirming that they are independent public accountants
with respect to the Company within the meaning of the Securities Act and the
applicable published rules and regulations thereunder and based upon the
procedures described in their letter delivered to you concurrently with the
execution of this Agreement (herein called the "Original Letter"), but carried
out to a date not more than three business days prior to the Closing Date or
such Option Closing Date (i) confirming, to the extent true, that the statements
and conclusions set forth in the Original Letter are accurate as of the Closing
Date or such Option Closing Date, and (ii) setting forth any revisions and
additions to the statements and conclusions set forth in the Original Letter
which are necessary to reflect any changes in the facts described in the
Original Letter since the date of the Original Letter or to reflect the
availability of more recent financial statements, data or information. The
letters shall not disclose any change, or any development involving a
prospective change, in or affecting the business or properties of the Company or
any of its subsidiaries which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Stock or the purchase of
the Option Stock as contemplated by the Prospectus.
26
(j) You shall have been furnished evidence in usual written or telegraphic
form from the appropriate authorities of the several jurisdictions, or other
evidence satisfactory to you, of the qualification referred to in paragraph (f)
of Section 6 hereof.
(k) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for listing by the Nasdaq National
Market upon official notice of issuance.
(l) On or prior to the Closing Date, you shall have received from all
directors, officers, key employees and Selling Securityholders agreements, in
form reasonably satisfactory to Chase Securities Inc., stating that without the
prior written consent of Chase Securities Inc. on behalf of the Underwriters,
such person or entity will not, for a period of 90 days following the
commencement of the public offering of the Stock by the Underwriters, directly
or indirectly, (i) sell, offer, contract to sell, make any short sale, pledge,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences or ownership of Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Securityholders. Any such termination shall be
without liability of the Company or the Selling Securityholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; provided, however, that (i) in the event of such
termination, (A) the Company agrees to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Management Selling Securityholders under this
Agreement, including all costs and expenses referred to in paragraphs (i) and
(j) of Section 6 hereof, and (B) each of the Selling Securityholders, severally
but not jointly, agrees to indemnify and hold harmless the Underwriters from all
costs or expenses referred to in the second to last paragraph of Section 6
hereof, and (ii) if this Agreement is terminated by you because of any refusal,
inability or failure on the part of the Company or the Selling Securityholders
to perform any agreement herein, to fulfill any of the conditions herein, or to
comply with any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
transactions contemplated hereby.
27
10. Conditions of the Obligation of the Company and the Selling
Securityholders. The obligation of the Company and the Selling Securityholders
to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholders by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Securityholders to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Securityholders; provided, however, that in the event of any such termination,
(A) the Company agrees to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the Company
and the Management Selling Securityholders under this Agreement, including all
costs and expenses referred to in paragraphs (i) and (j) of Section 6 hereof,
and (B) each of the Selling Securityholders, severally but not jointly, agrees
to indemnify and hold harmless the Underwriters from all costs or expenses
referred to in the second to last paragraph of Section 6 hereof.
11. Reimbursement of Certain Expenses. In addition to their other
obligations under Section 7 of this Agreement (and subject, in the case of a
Selling Securityholder, to the provisions of paragraph (f) of Section 7), the
Company and the Selling Securityholders hereby severally but not jointly agree
to reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them together with interest at the prime rate and (ii) such
persons shall provide to the Company, upon request, reasonable assurances of
their ability to effect any refund, when and if due.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholders and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.
13. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Chase Securities Inc., Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a
28
copy, which shall not constitute notice, to Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx
Xxxxxx; if to the Company, shall be mailed, telegraphed or delivered to it at
the Company's office, 000 Xxxxx Xxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: President with a copy, which shall not constitute notice, to Troop
Xxxxxxx Pasick Reddick & Xxxxx, LLP, 0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxxx; and if to the Selling
Securityholders, shall be mailed, telegraphed or delivered to the Custodian to
its attention at U.S. Stock Transfer Corporation, 0000 Xxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000-0000, Attention: Xxxxx Xxxxxx. All notices given by telegraph
shall be promptly confirmed by letter.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or the Selling Securityholders or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
Date, the provisions of paragraphs (l) of Section 6 hereof shall be of no
further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
29
Please sign and return to the Company and to the Selling Securityholders in
care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several Underwriters in accordance with its terms.
Very truly yours,
BIOSOURCE INTERNATIONAL, INC.
By: _____________________________________
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chairman of the Board, Chief
Executive Officer and
President
THE MANAGEMENT SELLING
SECURITYHOLDERS NAMED
IN SCHEDULE II HERETO
By: _____________________________________
Attorney-in-Fact
GENSTAR CAPITAL PARTNERS II, L.P.
By: Genstar Capital LLC, its general
partner
By: _____________________________________
Name:
Title:
STARGEN II LLC
By: ______________________________________
Name:
Title:
30
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
XXXX XXXXXXXX INCORPORATED
XXXXXX XXXXXX PARTNERS LLC
By Chase Securities Inc.
By __________________________
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
31
SCHEDULE I
UNDERWRITERS
Underwriters Number of Shares to be Purchased
------------ --------------------------------
Chase Securities Inc. ......................
Xxxx Xxxxxxxx Incorporated .................
Xxxxxx Xxxxxx Partners LLC..................
________
Total.................................. 4,000,000
=========
32
SCHEDULE II
SELLING SECURITYHOLDERS
Number of Shares Number of Shares
Name of Selling Securityholders of Underwritten Stock of Option Stock
------------------------------- --------------------- ------------------
Management Selling Securityholders:
----------------------------------
Xxxxx X. Xxxxxxxxxxx 83,000 --
Xxx X. Xxxxx 18,000 --
Xxxxxxx X. Xxxxxxxxxxx 8,000 --
Xxxxx X. Xxxxx, Ph.D 7,000 --
Xxxx X. Xxxxxxxx, Xx. 7,000 --
Xxxxxx X. Xxxxx 6,000 --
Xxxxxxx X. Xxxxxx 6,000 --
Xxxxxxx X. Xxxxxxxx-Xxxx 2,000 --
Jordan X. Xxxxxxx, Ph.D 3,000 --
Other Selling Securityholders:
------------------------------
Genstar Capital Partners II, L.P. 500,308 490,498
Stargen II LLC 9,692 9,502
------- -------
Totals.............................. 650,000 500,000
======= =======
33
ANNEX A
Matters to be Covered in the Opinion of Troop Xxxxxxx Xxxxxx Xxxxxxx & Xxxxx,
LLP Counsel for the Company and the Management Selling Securityholders
(i) Each of the Company and its subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation
and in good standing in each jurisdiction in which its ownership or leasing of
property requires such qualification, and has full corporate power and authority
to own or lease its properties and conduct its business as described in the
Registration Statement (such counsel being entitled to rely in respect of the
opinion in this clause upon the opinion of Xxxxxxxx Chance LLP set forth as
Annex C to this Agreement); all the issued and outstanding capital stock of each
of the subsidiaries of the Company has been duly authorized and validly issued
and is fully paid and nonassessable, and is owned by the Company free and clear
of all liens, encumbrances and security interests, and to the best of such
counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in such
subsidiaries are outstanding;
(ii) the authorized capital stock of the Company consists of _____ shares
of ___ Stock, of which there are outstanding _____ shares, and _____
shares of Common Stock, $____ par value, of which there are outstanding ______
shares (including the Underwritten Stock plus the number of shares of Option
Stock issued on the date hereof) and such additional number of shares, if any,
as may have been issued after ______ and prior to the Closing Date, pursuant to
_______; proper corporate proceedings have been taken validly to authorize such
authorized capital stock; all of the outstanding shares of such capital stock
(including the Underwritten Stock and the shares of Option Stock issued, if any)
have been duly and validly issued and are fully paid and nonassessable; any
Option Stock purchased after the Closing Date, when issued and delivered to and
paid for by the Underwriters as provided in the Underwriting Agreement, will
have been duly and validly issued and be fully paid and nonassessable; and no
preemptive rights of, or rights of refusal in favor of, stockholders exist with
respect to the Stock, or the issue and sale thereof, pursuant to the Certificate
of Incorporation or Bylaws of the Company and, to the knowledge of such counsel,
there are no contractual preemptive rights that have not been waived, rights of
first refusal or rights of co-sale which exist with respect to the Stock being
sold by the Selling Securityholders or the issue and sale of the Stock;
(iii) the Registration Statement has become effective under the Securities
Act and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission;
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(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act, the Exchange Act
and with the rules and regulations of the Commission thereunder;
(v) such counsel have no reason to believe that the Registration Statement
(except as to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein, as to which
such counsel need not express any opinion or belief) at the Effective Date
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus (except as to the financial statements
and schedules and other financial and statistical data contained or incorporated
by reference therein, as to which such counsel need not express any opinion or
belief) as of its date or at the Closing Date (or any Option Closing Date),
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(vi) the information required to be set forth in the Registration Statement
in answer to Items 9 and 10 (insofar as it relates to such counsel) of Form S-3
is to the best of such counsel's knowledge accurately and adequately set forth
therein in all material respects or no response is required with respect to such
Items;
(vii) such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(viii) the Company has the corporate power and authority to enter into the
Underwriting Agreement and to issue, sell and deliver to the Underwriters the
Stock to be issued and sold thereunder; and the Underwriting Agreement has been
duly authorized, executed and delivered by the Company;
(ix) the Underwriting Agreement has been duly executed and delivered by or
on behalf of the Management Selling Securityholders and the Custody Agreement
between the Management Selling Securityholders and U.S. Stock Transfer
Corporation, as Custodian, and the Powers of Attorney that are exhibits to the
Custody Agreements have been duly executed and delivered by or on behalf of the
several Management Selling Securityholders;
(x) the execution and delivery of the Underwriting Agreement and the issue
and sale by the Company of the shares of Stock sold by the Company as
contemplated by the Underwriting Agreement will not conflict with, or result in
a breach of, (A) the Certificate of Incorporation or Bylaws of the Company or
any of its subsidiaries, (B) any agreement or instrument filed with or
incorporated by reference as an exhibit to the Registration Statement or any
document incorporated by reference therein, (C) any applicable law or
regulation, or (D) so far as is known to such counsel, any order, writ,
injunction or decree, of any jurisdiction, court or governmental
instrumentality;
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(xi) to such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which the
Company is a party or of which any property of the Company is the subject which,
if determined adversely to the Company or any of its subsidiaries, would have a
Material Adverse Effect; and, to such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others;
(xii) to such counsel's knowledge, none of the Company or its subsidiaries
is in violation of its Certificate of Incorporation or Bylaws or equivalent
organizational documents;
(xiii) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company have waived such rights or
such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement;
(xiv) good and marketable title to the shares of Stock sold by the
Management Selling Securityholders under the Underwriting Agreement, free and
clear of all liens, encumbrances, equities, security interests and claims, has
been transferred to the Underwriters who have severally purchased such shares of
Stock under the Underwriting Agreement, assuming for the purpose of this opinion
that the Underwriters purchased the same in good faith without notice of any
adverse claims;
(xv) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been obtained
under the Securities Act or otherwise and such as may be required under state
securities or blue sky laws in connection with the purchase and distribution of
the Stock by the Underwriters;
(xvi) the information in the Prospectus under the captions "Relationships
and Related Transactions," and "Description of Capital Stock," to the extent
that such information constitutes matters of law or legal conclusions, has been
reviewed by such counsel and is an accurate summary in all material respects of
such matters and conclusions; and the form of certificate evidencing Common
Stock and incorporated by reference as an exhibit to the Registration Statement
complies with the Delaware General Corporation Law and applicable stock market
rules and regulations;
(xvii) the Stock sold by the Selling Securityholders is listed and duly
admitted to trading on the Nasdaq National Market, and the Stock issued and sold
by the Company will have been duly authorized for listing by the Nasdaq National
Market upon official notice of issuance; and
(xviii) the Company is not, and upon receipt and pending application of
the net proceeds from the sale of Stock to be sold by the Company in the manner
described in the Prospectus will not be, an "investment company" within the
meaning of such term under the Investment Company Act and the rules and
regulations of the Commission thereunder;
____________________________________
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Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or of the State of California, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representative and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
In addition, such counsel shall state that, with respect to the opinions in
numbered paragraphs (viii), (ix) and (xiv), Xxxxxxx Xxxxxxx & Xxxxxxxx, as
counsel for the Underwriters may rely on the opinion of such counsel, for the
purpose of rendering its opinion letter to the Underwriters.
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ANNEX B
Matters to be Covered in the Opinion of Xxxxxx & Xxxxxxx
Counsel for the Other Selling Securityholders
(i) Each of the Other Selling Securityholders has full power and authority
to enter into the Underwriting Agreement and to sell and deliver to the
Underwriters the Stock to be sold under the Underwriting Agreement; and the
Underwriting Agreement has been duly authorized, executed and delivered by or on
behalf of the Other Selling Securityholders;
(ii) the sale by the Other Selling Securityholders of the shares of Stock
as contemplated by the Underwriting Agreement will not conflict with, or result
in a breach of, (A) the organizational documents of any of the Other Selling
Securityholders, (B) any applicable law or regulation, or (C) so far as is known
to such counsel, any order, writ, injunction or decree, of any jurisdiction,
court or governmental instrumentality to which such Other Selling Securityholder
is a party or by which such Other Selling Securityholder is bound or to which
any of the property or assets of such Selling Securityholders is subject;
(iii) each of the Other Selling Securityholders has waived all
registration rights or rights of first refusal resulting from the filing of the
Registration Statement by the Company (other than with respect to Stock sold to
the Underwriters pursuant to the Underwriting Agreement) or such rights have
expired by reason of lapse of time following notification of the Company's
intent to file the Registration Statement;
(iv) good and marketable title to the shares of Stock sold by the Other
Selling Securityholders under the Underwriting Agreement, free and clear of all
liens, encumbrances, equities, security interests and claims, has been
transferred to the Underwriters who have severally purchased such shares of
Stock under the Underwriting Agreement, assuming for the purpose of this opinion
that the Underwriters purchased the same in good faith without notice of any
adverse claims; and
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
by the Other Selling Securityholders contemplated in the Underwriting Agreement,
except such as have been obtained under the Securities Act and such as may be
required under state securities or blue sky laws in connection with the purchase
and distribution of the Stock by the Underwriters.
____________________________________
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or of the State of California, upon
opinions of local counsel
38
satisfactory in form and scope to counsel for the Underwriters. Copies of any
opinions so relied upon shall be delivered to the Representative and to counsel
for the Underwriters and the foregoing opinion shall also state that counsel
knows of no reason the Underwriters are not entitled to rely upon the opinions
of such local counsel.
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ANNEX C
Matters to be Covered in the Opinion of Xxxxxxxx Chance LLP
Special Belgian Counsel for the Company
BioSource Europe S.A. has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Belgium, is duly qualified as a
foreign corporation and in good standing in each jurisdiction in which its
ownership or leasing of property requires such qualification, and has full
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; all the issued and
outstanding capital stock of BioSource Europe S.A. has been duly authorized and
validly issued and is fully paid and nonassessable.
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